State says shuttered Coconut Grove Playhouse could be sold to private bidders

The state of Florida, which took back control of the shuttered Coconut Grove Playhouse in October, has thrown everyone involved in the long-running effort to save the historic theater for a loop by advertising it for possible sale as surplus property.

The state Department of Environmental Protection, which manages state property, says it’s just following rules that require the agency to gauge potential interest in the 2.5-acre theater property, which includes the historically designated 1927 playhouse building and a big parking lot, on a highly visible corner on Main Highway.

But the move by the agency, which is now conducting an appraisal of the property, represents an unexpected — and potentially worrisome — twist in Miami-Dade Mayor Carlos Gimenez’s campaign to renovate and reopen the theater under county control just as it seemed on the verge of succeeding. The Mediterranean Revival theater, which closed abruptly in 2006, is widely considered a cultural and architectural treasure.

Gimenez based his effort on an assumption that the state would deed over — at no cost — the deteriorated playhouse to the county, which has earmarked $20 million in bond money for renovations. Under state law, surplus property is offered first to state colleges and universities at no charge, and next to counties and cities, before it’s put up for sale to the highest bidder.

But DEP says state rules require it to charge the county a fair-market price for the playhouse property — something Gimenez and Miami-Dade administrators say is not in the cards. Observers expect the property will be valued in the millions of dollars in a rapidly recovering real-estate market, though that figure could be affected by the fact that the theater is legally protected by historic designation and could not be torn down without extensive public review and considerable controversy.

The Miami-Dade property appraiser’s website puts the market value at $5.8 million.

DEP spokesman Patrick Gillespie said the agency has received at least five inquiries, but no offers, since the ad was released two weeks ago.

He expects the appraisal to be ready in early January, after which the state could offer it for free to the public colleges and, if they decline, to the city of Miami and the county for cash. That would trigger a 45-day window for the local governments to make a deal with the state before the playhouse goes for sale to private bidders, he said.

“We were a little surprised,’’ said Lisa Martinez, an aide to Gimenez. “The idea of purchasing that property for fair market value is not on the radar for us.’’

Instead, county officials and their supporters hope to persuade the state cabinet or the Legislature to waive the market-value rule and cede the property to the county given that it stands ready to spend millions on it.

“The Grove Playhouse is a special case,’’ said Miami-Dade property appraiser-elect Carlos Lopez-Cantera, the former state House majority leader who pushed for years for the state to retake control of the theater from a nonprofit board that critics say ran it into the ground. “It’s a complicated scenario, but I am more than confident that those in authority will recognize that.’’

But the state’s ad flabbergasted Grove activists who supported the takeover as the best way to reopen the theater, a beloved institution and a former economic linchpin for the village that they say has instead become an eyesore and a safety and fire hazard.

“It is very bizarre that, after waiting seven years to have the state come in, to then have the state put it up for sale,’’ said activist Nathan Kurland, who organized a raucous “Give it Back’’ protest outside the theater earlier this year. “There was never a thought in anyone’s mind that the state would say, ‘Screw the theater, let’s just sell it to a developer.’ ’’

County and city officials say they don’t think that will happen.

For one thing, said Miami Commissioner Marc Sarnoff, developers won’t be eager to acquire the property because of the deteriorated condition of the playhouse, the historic designation, and liens filed by the city against the property because of code violations. Fines have mounted to about $500,000, he said.

In addition, creditors owed money by the former playhouse board may also have claims on it, Sarnoff said.

“You would be selling a property with a significant cloud over the title, and subject to the historic designation, which means you can’t develop it based on whatever you want,’’ Sarnoff said.

The state had deeded the perennially debt-plagued playhouse to a volunteer board in 2004, but exercised an automatic reverter clause to retake it after the group failed to make headway on plans to build a new, smaller playhouse behind the historic facade and develop the parking lot to provide income to support the theater.

This year, Gimenez tried for months to reach settlements with playhouse creditors in exchange for assuming control of the property, but a lone holdout, developer Aries Group, which had a development agreement with the playhouse board, rejected county offers as too low, effectively scuttling the deal.

Miami-Dade administrators acknowledge they’re concerned about the playhouse’s fate and the short time window to resolve it, but say the county represents the most feasible option for the state.

“I don’t mean to minimize the danger here,’’ said Miami-Dade cultural affairs director Michael Spring. “But we have the resources and we have a reasonable plan, and I remain optimistic that wisdom will prevail.’’